THIS DECLARATION, made on the date hereinafter set forth by Hiwan Ridge Development Co., a Colorado Corporation, hereinafter referred to as "Declarant".

WITNESSETH:

WHEREAS, Declarant is the owner of certain property situate in the county of Jefferson, State of Colorado, which is more particularly described on Exhibit "A" attached hereto and made a part hereof, hereinafter referred to as the "Property"; and

WHEREAS, Declarant desires through this declaration of Covenants and organization of Hiwan Ridge Homeowners’ Association, Inc., to protect and maintain The Ridge at Hiwan as a prime residential area of the highest possible quality and value of the purpose of enhancing and protecting the value, desirability, and attractiveness of The Ridge at Hiwan, and

WHEREAS, Declarant desires to provide for the operation and maintenance of the General Common Areas, including private roads and green areas, and other related facilities.

NOW, THEREFORE, Declarant hereby declares that all of the properties described above shall be held, sold and conveyed subject to the following easements, restrictions, covenants and conditions which are for the purpose of protecting the value and desirability of, and which shall run with, the real property and be binding on all parties having any right, title or interest in the described properties or any part thereof, their heirs, successors and assigns, and shall inure to the benefit of each owner thereof.

ARTICLE I

DEFINITIONS

Section 1. Association. "Association" shall mean and refer to Hiwan Ridge Homeowners’ Association, Inc., a Colorado non-profit corporation its successors and assigns.

Section 2. Owner. "Owner" shall mean and refer to the record owner, whether one or more persons or entities, of a fee simple title to any Lot which is part of the Properties, including contract sellers, but excluding those having such interest merely as security for the performance of an obligation.

Section 3. Properties. "Properties" shall mean and refer to that certain real property hereinbefore described, and such additions thereto as may hereafter be brought within the jurisdiction of the Association.

Section 4. Common Areas. "Common Areas" shall mean any facility owned by the Association for the common use and enjoyment of the owners, including but not limited to the general green space and common roadways, as more specifically depicted on Exhibit "B" attached hereto and made a part hereof.

Section 5. Lot. "Lot" shall mean and refer to any numbered plot of land shown upon any recorded subdivision map of the Properties.

Section 6. Declarant. "Declarant" shall mean and refer to Hiwan Ridge Development Co., a Colorado Corporation, its successors and assigns if such successors and assigns should require more than one undeveloped Lot from the Declarant for the purpose of development.

Section 7. Mortgage. "Mortgage" shall mean and refer to any mortgage, deed of trust or other security instrument recorded in the records of the office of the Clerk and Recorder of Jefferson County, Colorado, and by which a Lot or any part thereof is encumbered.

Section 8. First Mortgage. "First Mortgage" shall mean and refer to the unpaid and outstanding purchase money Mortgage or purchase money deed of trust having priority of record over all other recorded liens except those governmental liens made superior by statute (such as general ad valorem tax liens and special assessments).

Section 9. Mortgagee. "Mortgagee" shall mean and refer to any person named as a mortgagee or beneficiary under any Mortgage under which the interest of an Owner is encumbered, or any successor to the interest of any such person under such mortgage.

Section 10. First Mortgagee. "First Mortgagee" shall mean and refer to the Mortgagee under a First Mortgage.

Section 11. FHA. "FHA" shall mean the Federal Housing Administration of the United States Department of Housing and Urban Development, including such department or agency of the United States government as shall succeed to the FHA in insuring notes secured by mortgages and deeds of trust on residential real estate.

Section 12. FHLMC. "FHLMC" shall mean the Federal Home Loan Mortgage Corporation or the Mortgage Corporation created by Title III of the Emergency Home Finance Act of 1970, including any successors thereto.

Section 13. FNMA. "FNMA" shall mean the Federal National Mortgage Association, a government-sponsored private corporation established as such pursuant to Title VIII of the Housing and Urban Development Act of 1968, including any successor thereto.

Section 14. GNMA. "GNMA" shall mean the Government National Mortgage Association administered by the United States Department of Housing and Urban Development, including any successor thereto.

Section15. VA. "VA" shall mean the Veterans Administration of the United States of America, including such department or agency of the United States government as shall succeed to the VA in its present function of issuing guarantees with respect to notes secured by mortgages on residential sites.

Section 16. Government Mortgage Agencies. "Government Mortgage Agencies" shall mean the GHA, the VA the FHLMC, the GNMA, the FNMA, or any similar entity, public or private, authorized, approved or sponsored by any governmental agency to insure, guarantee, make or purchase Mortgage loans.

Section 17. Member. "Member" shall mean and refer to those persons entitled to membership as provided in the Declaration.

Section 18. Board. "Board" shall mean and refer to the Board of Directors of the Association.

ARTICLE II

MEMBERSHIP AND VOTING RIGHTS

Section 1. Every owner of a Lot which is subject to assessment shall be a member of the Association. Membership shall be appurtenant to and may not be separated from ownership of any Lot which is subject to assessment.

Section 2. The Association shall have two classes of voting membership:

Class A. Class A members shall be all Owners, with the exception of the Declarant, and shall be entitled to one vote for each Lot owner. When more than one person holds an interest in any Lot, all such persons shall be members. The vote for such Lot shall be exercised as they determine, but in no event shall more than one vote be cast with respect to any Lot.

Class B. Class B member(s) shall be the Declarant and shall be entitled to three (3) votes for each Lot owned. The Class B membership shall cease and be converted to Class A membership on the happening of either of the following events, whichever occurs later:

(a) When the total votes outstanding in the Class A membership equal the total outstanding in the Class B membership, or

(b) on December 31, 2002 or upon notification to the members of its intent to transfer management of the Association to the Members.

ARTICLE III

COVENANT FOR MAINTENANCE ASSESSMENTS

Section I. Creation of the Lien and Personal Obligation of Assessments. The Declarant, for each Lot owned within the Properties, hereby covenants as provided for herein, and each Owner of any Lot by acceptance of a deed therefor, whether or not it shall be so expressed in such deed, is deemed to covenant and agree t pay to the Association; (1) annual assessment of charges, and (2) special assessments for capital improvements and as may be approved hereunder. The annual and special assessments, together with interest, cost, and reasonable attorney’s fees shall be a charge on the land and shall be a continuing lien upon the property against which each such assessment is made. Each such assessment, together with interest, costs and reasonable attorney’s fees, shall also be the personal obligation of the person who was the owner of such property at the time when the assessment fell due. The personal obligation for delinquent assessments shall not pass to his successors in title unless expressly assumed by them.

Section 2. Purpose of Assessments. The assessments levied by the Association shall be used exclusively to promote the health, safety, and welfare of the residents in the Properties, for the improvement and maintenance of the Common Areas and Roads, Architectural Control and other related purposes approved by the Board of Directors.

Section 3. Maximum Annual Assessment. Until January 1 of the year immediately following the conveyance of the first Lot to an Owner, the maximum annual assessment shall be $50.00 per Lot per month.

(a) From and after January 1 of the year immediately following the conveyance of the first Lot to an Owner the maximum annual assessment may be increased each year not more than 8% above the maximum assessment for the previous year without a two-thirds vote (2/3rds) vote of approval of the membership.

(b) From and after January 1 of the year immediately following the conveyance of the first Lot to an Owner, the maximum annual assessment may be increased above 8% by a vote of two-thirds (2/3rds) of each class of members who are voting in person or by proxy, at a meeting duly called for this purpose.

(c) The Board of Directors may fix the annual assessment at an amount not in excess of the maximum.

Section 4. Special Assessments for Capital Improvements. In addition to the annual assessments authorized above, the Association may levy, in any assessment year, a special assessment applicable to that year only for the purpose of defraying, in whole or in part, the cost of any construction, reconstruction, repair, or replacement of a capital improvement upon the Common Areas, including fixtures and personal property related thereto, provided that any such assessment shall have the assent to two-thirds (2/3rds) of the votes of each class of members who are voting in person or by proxy at a meeting duly called for this purpose.

Section 5. Notice and Quorum for Any Action Authorized Under Sections 3 and 4. Written notice of any meeting called for the purpose of taking any action authorized under Section 3 or 4 shall be sent to all the members not less than 30 days nor more than 60 days in advance of the meeting. At the first such meeting called, the presence of members or of proxies entitled to cast sixty percent (60%) of all the votes of each class of membership shall constituted a quorum. If the required quorum is not present, another meeting may be called subject to the same notice requirement, and the required quorum at the subsequent meeting shall be one-half (1/2) of the required quorum at the preceding meeting. Not such subsequent meeting shall be held more than 60 days following the preceding meeting.

Section 6. Uniform Rate of Assessment. Both annual and special assessments must be fixed at a uniform rate for all Lots and shall be modified annually as necessary to accurately reflect costs incurred. The Declarant shall not be required to pay assessments on any Lot or Lots owned by it until such specific Lot or Lots are sold and transferred by Declarant.

Section 7. Date of Commencement of Annual Assessments: Due Dates. The annual assessments on a lot as provided for herein shall commence upon the transfer of he lot from Declarant. The Board of Directors shall fix the amount of the annual assessment against each Lot at least thirty days in advance of each annual assessment period. Written notice of the assessment shall be sent to every owner subject thereto. Such assessments, at the discretion of the Board may be billed monthly, quarterly, or annually. The due dates shall be established by the Board of Directors. The Association shall, upon demand, and for a reasonable charge, furnish a certificate signed by an officer of the Association setting forth whether the assessments on a specified Lot have been paid. A properly executed certificate of the Association as to the status of assessments on a Lot is binding upon the Association as of the date of its issuance.

Section 8. Effect of Nonpayment of Assessments. Remedies of the Association. Any assessment not paid within thirty (30) days after the due date shall bear interest from the due date at the rate of 12 percent per annum. The Association may bring an action of law against the Owner personally obligated to pay the same, or foreclose the lien against the property. No Owner may waive or otherwise escape liability for the assessments provided for herein by non-use of the Common Areas or abandonment of his Lot.

Section 9. Subordination of the Lien to Mortgages. The lien of any purchase money loan evidenced by a first mortgage of record (including deed of trust) and to any executory land sales contract wherein the Administrator of Veteran Affairs (Veterans Administration) is seller, whether such contract is owned by the Veterans Administration or its assigns, and whether such contract is recorded or not. Sale or transfer of any Lot shall not affect the lien for said assessment charges except that sale or transfer of any Lot pursuant to foreclosure of any such mortgage or any such executory land contract, or any proceeding in lieu thereof, including a deed in lieu of foreclosure, or cancellation or forfeiture of any such executory land sales contract shall extinguish the lien of assessment charges which became due prior to any such sale or transfer, or foreclosure, or any proceeding in lieu thereof, including deed in lieu of foreclosure, or cancellation or forfeiture of any such executory land sales contract. No such sale, transfer, foreclosure, or any proceeding in lieu thereof, including deed in lieu of foreclosure, not cancellation or forfeiture of any such executory land sales contract shall relieve any Lot from liability for any assessment charges thereafter becoming due, not from the lien thereof.

Section 10. Exempt Property. All properties dedicated to, and accepted by, a local public authority and all properties owned by a charitable or non-profit organization exempt from taxation by the laws of the State of Colorado shall be exempt from the assessments created herein, except no land or improvements devoted to dwelling use shall be exempt from said assessments.

ARTICLE IV

ARCHITECTURAL CONTROL

Section 1. Architectural Approval. No building, fence, wall, other structure, or other improvement shall be commenced, erected or maintained upon the Properties, nor shall any exterior addition to or change or alteration therein be made until the plans and specifications showing the nature, kind, shape, heights, materials, and location of the same shall have been submitted to and approved in writing as to harmony of external design and location in relation to surrounding structures and topography by the Board of Directors of the Association, through an architectural committee composed of three (3) or more representatives appointed by the Board, which may or may not be members of the Association. Any live tree removal, landscaping or gardening shall be deemed an improvement for purposes of this Article. Thereafter the Architectural Control Committee shall be responsible for reviewing and approving all improvements, construction, landscaping, or other submissions required by the provisions of these covenants. In addition, the Architectural Control Committee shall have absolute and total design control over the Properties. In addition to the express provisions of these covenants, the Architectural Control Committee shall exercise its best judgment in reviewing all proposed improvements and changes, as set forth herein, with the end purpose of maintaining the highest standards of residential living. In the event said Board, or its designated Committee, fails to approve or disapprove such design and location within one-hundred twenty (120) days after said plans and specifications have been submitted to it, approval will not be required and this Article will be deemed to have been fully complied with. The Architectural Control Committee may from time to time promulgate and approve Architectural Standards and Construction Regulations, and to modify same, provided said Regulations and amendments shall apply only to units constructed subsequent to the adoption of said Regulations.

Section 2. Contractor Suitability. The Architectural Control Committee shall have the right to disapprove the choice by an Owner of any construction contractor (including the Owner) of the construction of any building, house, outbuilding, treehouse, playhouse, pen, doghouse and dogruns, tennis court, basketball backboard, porch, patio, gazebo, excavation, landscaping, pit, cave, tunnel, bridge, fence, wall or any other structure of improvement of any kind on any Lot. The grounds for such disapproval shall be only one or both of the following: (1) a reasonable belief that the contractor is not financially responsible, (2) nonconformance by the contractor with approved plans when previously undertaking construction work on a Lot of the Properties, and (3) a reasonable belief based on prior undertakings of contractor that contractor cannot complete construction in accordance with the standards set by the Architectural Control Committee. This Declaration establishes no duty upon Declarant or the Architectural Control Committee to investigate the financial responsibility of the construction work, and this Declaration vests no rights in Owners, and contractor, or other third party as against Declarant, the Architectural Control Committee, or the Association with respect to approval or disapproval of construction contractors.

Section 3. Approval of Contractor and Inspection of Construction. No Owner shall commence construction of improvement of any building, house, outbuilding, treehouse, playhouse, pen, doghouse or dogruns, tennis court, basketball backboard, porch, patio, gazebo, excavation, landscaping, garden, pit, cave, tunnel, bridge, fence, wall, or any other improvement or structure of any kind to be placed on any Lot until the Owner has obtained a building permit, if necessary, from Jefferson County, Colorado, or from any governmental subdivision having jurisdiction over building permits on The Ridge at Hiwan and until the approved building permit and improvement plans have been submitted to the Architectural Control Committee for approval of contractor suitability as specified in Section2, above. Properties and improvements thereon prior to installation, subject to the same criteria provided for elsewhere in this Article.

Section 5. Restoration of Lots. Upon completion of any improvement or construction on any Lot, the Owner shall to the greatest extent possible as a minimum restore the Lot to the condition which existed prior to such construction (taking into account such construction) so that the Lot and improvements shall be in harmony with the surrounding unimproved property. In the event of the issuance of a certificate of occupancy or actual occupancy of any Lot prior the September 15 on any calendar year, the Owner must complete said restoration within 45 days following the date of the issuance of the certificate of occupancy or actual occupancy of said Lot, whichever is earliest. In the event of the issuance of a certificate of occupancy or actual occupancy of the Lot after September 15 of any given year, the Owner must complete the restoration of said Lot on or before June 1 of the following year. In the event restoration is not completed within the applicable time period, Declarant may complete said restoration at the expense of the Owner. This covenant contained in Section 5 is a covenant running with the land between each Owner and Declarant and, notwithstanding any other provision hereof, may be enforced only by Declarant, its successors and assigns.

ARTICLE V

EXTERIOR MAINTENANCE ON LOTS

Each Lot Owner shall provide exterior maintenance upon each Lot owned by him which is subject hereto, including but not limited to paint, repair, replacement and care of roofs, gutters, downspouts, exterior building surfaces, trees, shrubs, grass, walks, and other exterior improvements.

In the event that said maintenance is not performed by the Owner of the Lot needing such maintenance or repair, the cost of such exterior maintenance shall be added to and become part of the assessment to which such Lot is subject, and the Association may enter upon the property at any time during reasonable business hours to carry out such maintenance.

ARTICLE VI

USE RESTRICTIONS

Section 1. The use of the Properties, Lots and Common Areas (which shall include all such facilities so designated by Declarant, and as depicted on Exhibit "B" hereto), and improvements thereon shall be subject to the restrictions hereinafter set forth.

Section 2. No animals, livestock, or poultry of any kind shall be raised, bred or kept on any Lot, except that a maximum of two (2) dogs and/or two (2) cats, or other household pets may be kept, provided that they are not kept, bred or maintained for any commercial purpose, all subject to Jefferson County ordinances. All household pets shall be controlled by their owner and shall not be allowed off of the owner’s lot except when properly leashed and accompanied by the pet owner or his representative. Each owner of a household pet shall be financially responsible for liable for any damage caused by said household pet.

Section 3. No advertising sign (except on of not more than five square feet per side, containing the words "For Sale" or "For Rent", unless said sign is disallowed by the Association), billboards, unsightly objects, or nuisances shall be erected, placed or permitted to remain on any Lot or be used in any way or for any purpose which may endanger the health or unreasonably disturb the Owner of any residence thereof. Declarant shall be exempt from sign provisions during the term of Class B ownership.

Section 4. All equipment, garbage cans, service yards, wood piles or storage piles shall be kept so as to conceal them from view of neighboring Lots and streets. All rubbish, trash or garbage shall be regularly removed from the premises and shall not be allowed to accumulate thereon.

Section 5. No boat, camper, trailer, truck, motorcycle, disabled, junk or abandoned vehicles, recreational vehicle, any other vehicle, the primary purpose of which is recreational, sporting or commercial use shall be parked or stored in, on or about any streets, within the property, except within the attached garage. The Association shall have the right to enter Owner’s property to remove and store at Owner’s expense vehicles in violation of this Section. Owner shall be entitled to thirty (30) days written notice prior to such action by the Association.

Section 6. No Lot shall be used as storage or work space for rebuilding of any motor vehicles or vehicles described in Section 5, above or for the storage of explosives, gasoline or other volatile and/or incendiary materials or devices. Gasoline or fuel for Owner’s lawnmower, snowblower and the like may be maintained on an incidental basis on the premises by an amount not to exceed on-half gallon. Other than short-term guests or agents of Owner, no more than three (3) vehicles per Lot shall be kept on the property unless otherwise approved in writing by the Association. Owner shall be entitled to park one vehicle regularly in other than garage areas. To the extent Owner utilizes garage space for other than parking of vehicles, the number of vehicles allowed per lot shall be reduced to two or one. Garage doors shall remain closed when not in use for ingress or egress of said vehicles or the occupants of said Lot.

Section 7. No exterior television, radio antennas or satellite dish of any sort shall be placed, allowed or maintained upon any portion of any Lot except as may be approved by the Architectural Control Committee.

Section 8. No noxious or offensive activity shall be carried on upon any Lot or other properties subsequently acquired by the Association nor shall anything be done thereon which may be or become an annoyance or nuisance to other owners including, without limitation, noxious fumes, smoke, excessive or continuing loud noises, interference with radio or television reception and excessive draining of water or other effluents onto any adjoining Lot.

Section 9. No further subdivision or resubdivision of any Lot or combination of Lots covered hereunder shall be permitted.

Section 10. Easements and rights of way as described on the recorded plat of the herein subdivision or in any easement agreement are reserved for poles, wires, pipes, and conduits for electricity, cable T.V., gas, telephone, sewer, drainage water, sidewalks and pedestrian trails, snow removal, erosion control, reservoirs, water facilities or any other utility purposes, together with the right of ingress and egress for further construction, maintenance and repair thereof along the side and rear lot lines of each Lot contained in the said plat, and as otherwise shown and described therein. No dwelling, improvements, materials, equipment, shrubbery, trees, plantings, or refuse shall be placed without the Association’s written approval on any part of said property within the area of the easements reserved. No buildings, fences, or structures of any type shall be build without express Association approval over, across, along the line of, or in such a manner as to include such easements within the Lot, but such easements shall remain open and readily accessible for service and maintenance of utility and drainage facilities and other such easements as reserved in this covenant. Any such improvements allowed in areas covered by easements may be removed by the Association without compensation the Owner.

Section 11. No structure of a temporary character, trailer, tent, or accessory building shall be placed on any Lot, temporarily or permanently, and no used structure of any sort shall be moved onto any Lot. In any event, no trailers of any type shall be placed or kept on any Lot unless such trailers are kept in an enclosed garage. The foregoing covenant shall not apply to Declarant’s or its agents’ real estate sales office and/or construction trailer in the activities conducted in connection with such sales and/or development activity of Declarant.

Section 12. No owner shall store more than one (1) face cord of wood on any Lot unless stored in an approve, enclosed structure on the premises.

Section 13. In the event of any conflict between the use restrictions set forth in the Article and any use restriction or regulation of any applicable governmental agency having jurisdiction over the Properties, the more stringent use restrictions will control. Nothing set forth in the Declaration shall be deemed to modify the plat for The Ridge at Hiwan, Sixth Filing, a subdivision of part of The Ridge at Hiwan official Development Plan as recorded in Book 108, at Pages 11,12 and 13 Reception No. 92017068, Jefferson County records. In the event of any conflict between the terms hereof and the terms of said plat an/or ODP, the plat and/or ODP shall be deemed controlling, to the extent said plat and/or ODP is more stringent.

ARTICLE VII

EASEMENTS

Each Lot shall be subject to an easement for encroachments created by construction, settling, overhangs, and/or ice, snow and water buildup or runoff as designed or constructed by the Declarant. A valid easement for said encroachments and for the maintenance of same, so long as it stands, shall and does exist. In the event the structure is partially or totally destroyed and then rebuilt, the owner of the units or Common Areas due to construction shall be permitted and that a valid easement for said encroachment and the maintenance thereof shall exist.

ARTICLE VIII

USE OF COMMON AREAS AND RIGHTS THEREIN

Section 1. Official Development Plan. The Common areas shall be used as described in the recorded ODP for The Ridge at Hiwan, Sixth Filing, as recorded in the Jefferson County records.

Section 2. Owner’s Easements of Enjoyment. Every Owner shall have a right and easement of enjoyment in and to the General Common Areas which shall be appurtenant to and shall pass with the title to every Lot, subject to the following provisions:

(a) the right of the Declarant or the Association at any time and from time to time to build recreational facilities on, over, under, and above the General Common Areas;

(b) the right of the Declarant or the Association to charge reasonable admission and other fees for the use of any recreational facility situated upon the General Common Areas;

(c) the right of the Declarant or the Association to suspend the voting rights and right to use of the General Common Areas or portions thereof the recreational facilities by an Owner for any period during which any assessment against his Lot remains unpaid; and for a period not to exceed 60 days for any infraction of its published rules and regulations except that such suspension shall not, in any manner, interfere with the rights of Owner, his family members, his guests, licensees, invitees, and installment contract purchasers to free access for purposes of ingress and egress to and from his Lot;

(d) the right of the Declarant of the Association to dedicate, transfer, assign, or grant permission to use all or any part of the General Common Areas by any governmental subdivision, public agency, authority, or public or private utility, for such purposes and subject to such conditions as may be agreed to.

Section 3. Delegation of Use. Any Owner may delegate, but only in accordance with, and subject to the limitations of the By-Laws of the Association, and any rules and regulations promulgated in accordance herewith, his right of enjoyment to the General Common Areas and facilities to the members of his family, his tenants, guests, or contract purchasers who reside on the property.

ARTICLE IX

INSURANCE

A. The Association shall maintain insurance covering all the Common Areas as follows:

1. A policy of property insurance an amount equal to the full replacement value (i.e. 100% of current "replacement cost" exclusive of land, excavation and other items normally excluded from coverage) of the Common Areas with insurance to afford protection against at least the following:

a. Loss or damage by fire and other hazards covered by standard extended coverage endorsement.

b. Such other risks as shall customarily be covered with respect to projects similar in construction, location and use.

2. A comprehensive policy of public liability insurance covering all of the Common Areas insuring the Association in an amount not less that $1,000,000.00 covering all claims for personal injury and/or property damage arising out of a single occurrence, such coverage to include protection against water damage liability for property of others, and, if applicable, such other risks as shall customarily by covered with respect to projects similar in construction, location and use.

3. The Association shall maintain adequate fidelity coverage to protect against dishonest acts on the part of officers, directors, trustees, and employees of such Association and all others who handle, or are responsible for handling funds of the Associations. Such fidelity bonds shall meet the following requirements:

a. all such fidelity bonds shall name the Association as obligee; and

b. such fidelity bonds shall be written in an amount equal to at least 150% of the estimated annual operating expenses of the Common Areas, including reserves; and

c. such fidelity bonds shall contain waivers of any defense based upon the exclusion of persons who serve without compensation from any definition of "employee" or similar expression.

B. The Association shall, at least every two (2) years obtain an appraisal for insurance purposes which shall be maintained as a permanent record, showing that the insurance in any year represents on hundred percent (100%) of the full replacement value of the Common Areas insured as provided herein.

ARTICLE X

CONDEMNATION

A. If at any times during the continuance of ownership pursuant to this Declaration or any Common Area shall be taken or condemned by any public authority or sold or otherwise disposed of in lieu of or in avoidance thereof, the following provisions of the Article shall apply:

1. All compensation, damages or other proceeds therefrom, the sum of which is hereinafter called the "Condemnation Award" shall be payable to the Association.

2. In the event of complete taking:

a. of all of the Common Areas or if the Common Areas are condemned, or sold or otherwise disposed of in lieu of or in avoidance thereof, the Condemnation Award shall be apportioned among the Owners equally and payment of said apportioned amounts will be payable to the Owner and the first mortgagee of this site jointly.

b. on the basis of the principal set forth in the last preceding paragraph, the Association shall as soon as practicable deterring the share of the Condemnation Award to which each Owner is entitled.

3. In the event that less than the entire common Areas are taken or condemned, or sold or otherwise disposed of in lieu of or in avoidance thereof, the Condemnation Award shall first be applied by the Association to the rebuilding or replacement of those improvements on the Common Areas damaged or taken by the condemning public authority, unless two-thirds (2/3rds) of the members and all of the first mortgagees of each Lot agree otherwise.

ARTICLE XI

FNMA AND FHLMC REQUIREMENTS

(The following requirements shall apply to any FNMA/FHLMC underwriting of the subject Property).

Section 1. The Association, upon request of any First Mortgagee, (which for this purpose includes the beneficiary of any first deed of trust) will give any such mortgagee written notification of any default in the performance by any borrower of any obligation under the Declaration, the Articles of Incorporation of The Ridge Association, or the By-Laws, which default is not cured within sixty (60) days after the same shall occur. Such written notification shall be sent to such address as the mortgagee may determine.

Section 2. The Association shall make available to owners and lenders, and to holders, insurers or guarantors of any first mortgage, current copies of the declaration, bylaws, other rules concerning the project and the books, records and financial statements of the Association, within a reasonable time following such request. "Available" means available for inspection, upon request, during normal business hours or under other reasonable circumstances.

Section 3. Any holder, insurer or guarantor of a first mortgage shall be entitled, upon written request, to an audited financial statement for the immediately preceding fiscal year, free of charge to the party so requesting with a reasonable time of allowing such request.

Section 4. A lien for assessments shall not be affected by any sale or transfer of a unit, except that a sale or transfer pursuant to a foreclosure of a first mortgage shall extinguish a subordinate lien for assessments which became payable prior to such sale or transfer. However, any such delinquent assessments which were extinguished pursuant to the foregoing provisions may be relocated and assessed to all lots as a common expense. Any such sale or transfer pursuant to a foreclosure shall not relieve the purchaser or transferee of a unit estate from liability for, nor the unit estate from the lien of, any assessments made thereafter.

Section 5. Any First Mortgagee who obtains title to a Lot pursuant to the remedies provided in the deed of trust or mortgage or foreclosure of the deed of trust or mortgage or by deed in lieu of foreclosure will not be liable for such Lot’s unpaid dues or charges which accrue prior to the acquisition of title to such Lot by the Mortgagee.

Section 6. Unless at least seventy five percent (75%) of the First Mortgagees (based upon one vote for each first mortgage owned) or Owners (other than Declarant) of the individual Lots in The Ridge at Hiwan, Sixth Filing, shall have given their prior written approval, the Association shall not be entitled to:

(a) by act or omission seek to abandon, partition, subdivide, encumber, sell, or transfer the Common Areas. The granting of easements for public utilities or for other public purposes consistent with the intended use of the Common Areas shall not be deemed a transfer within the meaning of this clause;

(b) change the method of determining the obligations, assessments, dues or other charges which may be levied against any Lot, or Owner;

(c) by act or omission change, waive, or abandon any scheme of regulations, or enforcement thereof, pertaining to the architectural design or exterior appearance of Units constructed on Lots, the maintenance of the Common Areas, fences and driveways, or the upkeep of lawns and plantings in the Properties;

(d) use hazard insurance proceeds for leases to any Common Areas for other than the repair, replacement, or reconstruction of such Common Areas.

Section 7. First Mortgages of Lots may, jointly or singly, pay taxes or other charges which are in default and which may or have become a charge against the Common Area and may pay overdue premiums on hazard insurance policies, or secure new hazard insurance coverage on the lapse of a policy, for such common Areas and First Mortgagees making such payments shall be owed immediate reimbursement therefor from the Association. This provision constitutes an agreement with each First Mortgagee, its successors and assigns, that any such mortgagee or mortgagees is entitled to such reimbursement.

Section 8. At each annual meeting, the Board of Directors of the Association shall estimate the amount necessary to provide an adequate reserve fun for maintenance, repair, or replacement of those facilities placed on the Common Areas on a periodic basis and shall provide that such amount shall be payable as a part of the regular annual assessments. The Board of Directors shall include as a part of the regular annual assessments as amount sufficient to pay expense of: (a) fire and extended peril insurance coverage on the structures and exteriors of the buildings for their full replacement value; and (b) general liability insurance coverage on The Ridge Common Areas in such amount as the Board of Directors shall deem reasonable and prudent.

Section 9. In the event of any damage or destruction to the Common Areas or if all or any part thereof shall be taken by exercise of eminent domain the proceeds of any condemnation award shall be applied to the repair or replacement of the damaged, destroyed, or condemned Common Areas or distributed for the payment of general (ad Valorem) property taxes, if any, as the Board of Directors may determine. Thereafter, any such funds shall be applied as all First Mortgagees shall agree.

Section 10. In addition to the requirements of this Declaration, any agreement for professional management of The Ridge Development or any other contract providing for services by Declarant must provide for termination by either party without cause or payment of a termination fee on ninety (90) days or more written notice on any such contract shall have a maximum term of three (3) years.

Section 11. No unit may be leased or rented for a period of less than 30 days.

Section 12. Rights of Eligible Mortgage Holders and Eligible Insurers or Guarantors:

A. Notice of Action: Upon written request to the Association, identifying the name and address of the holder, insurer or guarantor and the unit estate number or address, any such eligible mortgage holder or eligible insurer or guarantor will be entitled to timely written notice of:

1. Any condemnation loss or any casually loss which affects a material portion of the project or any unit on which there is a first mortgage held, insured, or guaranteed by such eligible mortgage holder or eligible insurer or guarantor, as applicable;

2. Any delinquency in the payment of assessment or charges owed by an owner of a unit estate subject to a first mortgage held, insured or guaranteed by such eligible holder or eligible insurer or guarantor, which remains uncured for a period of sixty (60) days;

3. Any lapse, cancellation or material modification of any insurance policy or fidelity bond maintained by the Association;

B. Other Provisions for Eligible Mortgage Holders. Eligible mortgage holders shall also be afforded the following rights:

1. Any restoration or repair of the project, after a partial condemnation or damage due to an insurable hazard, shall be performed substantially in accordance with the declaration and the original plans and specifications, unless other action is approved by eligible holders holding mortgages on a Lot which have at least 75 percent of the votes of units subject to eligible holder mortgages.

2. Any election to terminate the legal status of the project after substantial destruction of a substantial taking in condemnation of the project property must require the approval of eligible holders holding mortgages on units which have at least 75 percent of the votes of units subject to eligible holder mortgages.

3. Unless the formula for reallocation of interests in the common facilities after a partial destruction of the project is fixed in advance by the constituent documents or by applicable law, no reallocation of interest in the Common Areas resulting from a partial condemnation or partial destruction of such a project may be effected without the prior approval of eligible holders holding mortgages on all remaining unit estates whether existing in whole or part, and which have at least 75 percent of the votes of such remaining unit estates subject to eligible holder mortgages.

4. When professional management has been previously required by any eligible mortgage holder or eligible insurer or guarantor, whether such entity became an eligible mortgage holder or eligible insurer or guarantor at that time or later, any decision to establish self management by the Association shall require the prior consent of owners of Lots to which at least 67 percent of the votes in the Association are allocated and the approval of eligible holders holding mortgages on unit estates which have at least 75 percent of the votes of unit estates subject to eligible holder mortgages.

C. Amendment to Documents. The following provisions do not apply to amendments to the constituent documents or termination of the Association made as a result of destruction, damage or condemnation described above, or to a reallocation of interests in the Common Areas which might occur pursuant to any plan of expansion or phased development contained in the original constituent documents.

1. The consent of Owners of units to which at least 75 percent of the votes in the Association are allocated and the approval of eligible holders holding mortgages on units which have at least 75 percent of the votes of unit estates subject to eligible holder mortgages, shall be required to terminate the legal status of the project as a project.

2. The consent of the owners of unit estates to which at least 75 percent of the votes in the Association are allocated and the approval of eligible holders holding mortgages on unit estates which have at least 75 percent of the votes of unit estates subject to eligible holder mortgages, shall be required to add or amend any material provisions of the constituent documents of the project, which establish, provide for, govern or regulate any of the following:

a. Voting;

b. Assessments, assessment liens or subordination of such liens;

c. Reserve for maintenance, repair and replacement of the Common Areas;

d. Insurance or Fidelity Bonds;

e. Responsible for maintenance and repair of the several portions of the project;

f. Expansion or contraction of the project of the addition, annexation or withdrawal of property to or from the project;

g. Boundaries of any unit;

h. The interests in the general Common Areas;

i. Leasing of units on Lots;

j. Imposition of any right of first refusal or similar restriction on the right of a unit estate owner to sell, transfer, or otherwise convey his or her unit estate;

k. Any provisions which are for the express benefit of mortgage holders, eligible mortgage holders or eligible insurers or guarantors of first mortgages on unit estate.

3. An addition or amendment to such documents shall not be considered material if it is for the purpose of correcting technical errors, or for clarification only. An eligible mortgage holder who receives a written request to approve additions or amendments who does not deliver or post to the request party a negative response within 30 days shall be deemed to have approved such request.

ARTICLE XII

GENERAL PROVISIONS

Section 1. Enforcement. The Association, or any Owner, shall have the right to enforce, by any proceeding at law or in equity, all restrictions, conditions, covenants, reservations, liens and charges now or hereafter imposed by the provisions of this Declaration. Failure by the Association or any Owner to enforce any covenant or restriction herein contained shall in no event be deemed a waiver of the right to do so thereafter.

Section 2. Severability. Invalidation of any one of these covenants or restrictions by judgment or court order shall in no manner affect any other provisions which shall remain in full force and effect.

Section 3. Amendment. The covenants and restrictions of this Declaration shall run with and bind the land, for a term of twenty (20) years from the date this Declaration is recorded, after which time they shall be automatically extended for successive periods of ten (10) years. This Declaration may be amended during the first twenty (20) year period by an instrument signed by not less than ninety (90%) percent of the Lot Owners, and thereafter by an instrument signed by not less than seventy-five (75%) percent of the Lot Owners. Any amendment must be recorded in Jefferson County.

Section 4. Title. Title to a Lot may be held or owned by any persons and any entity or entities and in any manner in which title to real property may be held or owned in the State of Colorado.

Section 5. Inseparability. Every gift, devise, bequest, transfer, encumbrance, conveyance, or other disposition of a Site and house thereon shall be presumed to be a gift, devise, bequest, transfer, encumbrance, or conveyance respectively of the entire Lot, including each easement, license, or Common Area designated for exclusive Owner use, together with all other appurtenant rights created by law or by this declaration.

Section 6. No Partition. The Common Areas shall be owned by the Association, and neither any Owner, group of Owners, nor the Association shall bring any action for partition or division of such area. Similarly, no Lot shall be divided between or among the Owners thereof.

Section 7. Access to Houses and Lots for Maintenance Repair and Emergencies. The Board of Directors of the Association or their delegated representatives, or the Declarant should the Board of Directors fail to act, shall have the irrevocable right to have access to each house or dwelling on any Lot from time to time during reasonable hours as may be necessary for the maintenance, repair, or replacement on any Lot, any structure thereon, including tree removal or any of the Common Areas accessible therefrom. All maintenance, repairs, or replacements of any Lot or any structure thereon shall be the expense of the Owner thereof. Such right of access shall be immediate for the making of emergency repairs therein in order to prevent property damage or personal injury. All damaged improvements shall be restored to substantially the same condition which they existed prior to the damage. All maintenance, repairs, or replacements of any Lot or any structure thereon shall be the expense of the Owner thereof. All maintenance, repairs, and replacements of the common Areas shall be the common expense of all of the Owners, provided, however, if such damage is caused by a negligent or tortuous act of any Owner, members of this family, his agent, employee, invitee, licensee, or tenant, then such Owner shall be responsible and liable for all such damage. This Declaration establishes no duty upon the Board of Directors of the Association or the Declarant to maintain, repair, or replace any Lot or any structure thereon, and this Section 7 vests no rights in Owners or any other person as against the Board of Directors of the Association, the Association, or the Declarant.

Section 8. Declarant’s Right to Use of Common Areas. The Declarant shall have a nonexclusive easement to make such use of the Common Areas as may be necessary or appropriate to perform the duties and functions which it is obligated or permitted to perform pursuant to this Declaration, including the right to construct and maintain in the General Common Areas maintenance and storage facilities for use by the Association or the Declarant. Declarant may construct and maintain on the Common Areas recreational facilities for use by the members of the Association and, with the approval of the Board of Directors, for use by other persons.

Section 9. FHA/VA Approval. As long as there is a Class B membership, the following actions will require the prior approval of the Federal Housing Administration and/or the Veterans Administration (if the project has VA and/or FHA approval): Annexation of additional properties, dedication of Common Areas, and amendment of this Declaration of Covenants, Conditions, and Restrictions.

Section 10. Notice. Any notice required to be sent to any Owner under the provisions of this Declaration shall be deemed to have been properly sent when mailed, post-paid, the last known address of the person who appears as Owner on the records and the Association at the time of such mailing, and to the address of the property.

Section 11. Annexation of Additional Property. Additional residential property and General Common Areas as shown on the recorded Official Development Plan for The Ridge at Hiwan, Sixth Filing, may be annexed to the properties at the discretion of Declarant by an amendment to this Declaration or by a deed of any General Common Areas to the Association . No such anne